Ryan Housefield, Senior Vice President of Sales for Marquis, recently joined The Financial Experience (FinX) Podcast to discuss the evolution of CRM tools over the last decade and what separates financial companies in their use (or misuse) of CRM. Click here to listen to FinX Podcast Episode 14.
Our current environment is changing daily. With the future remaining uncertain, financial institutions must be quick to adapt and utilize all resources available to maintain business as usual, even in unusual circumstances.
Now more than ever, your customers/members need to be able to connect with you and feel a sense of protection. With social distancing practices and shelter-in-place orders in effect around the globe, it may seem like connections are strained. Despite this new temporary normal, you can still maintain your customer/member connections.
It is important to meet your audience where they are – in the digital space. In the month of March Marquis clients used DocuMatix to send more than 87 million emails to their employees and customer/members. How did you communicate with your employees and customers/members?
Here are some helpful tips and best practices to help you navigate the digital marketing space.
Don’t Neglect Internal Communications
Your front line needs to stay in the know in order to provide accurate and timely information to customers/members. Ensure your staff stays updated on things such as operational changes, new procedures and branch closures through internal emails or newsletters. Providing accurate information to your employees will be key in maintaining customer/member trust and making them feel comfortable in an uncomfortable situation.
Utilize Text Messaging and Email
Because in-person interaction is at a mandatory minimum, maintaining timely contact through texting and emails where appropriate will be most impactful. Consider creating a text message key word just for emergency notifications and notify your audience about branch closures and modified hours. Emails and text messages are a quick, effective way to ensure your message is delivered.
Apply Real-Time, Accessible Updates
With branch closures and modified business hours changing daily, your customers/members are looking for your updates. In addition to text messages and emails, post on your institution’s social media accounts and website with frequent, important news regarding new procedures, branch closings, etc. Messages should be clear, easily accessible and should provide your customers/members with the affirmation that you have their backs.
Maintain Web Forms to Schedule Appointments
Web forms are your new best friend. Provide appointment scheduling options through webforms placed on your website or in emails to schedule virtual appointments and minimize in-person branch visits to maintain safe social distancing requirements. Web forms will ensure accurate staffing levels are maintained and personalized interactions still occur.
Stay Vigilant and Flexible
A strong digital marketing platform is imperative for every financial institution. Evaluate what works for your institution and where your strategies could use change. Visit www.legacy.gomarquis.com/marketing-solutions to learn more about DocuMatix, the Marquis digital marketing product suite.
How HMDA data and increased transparency can affect fair lending.HMDA submission season is just around the corner and your institution’s data will be under close scrutiny by more than regulators. Litigators, advocates and the general public can view the data and possibly use it to identify institutions at fair lending risk. But since HMDA data alone is not enough, this can lead to misinterpretation, unwarranted accusations and loss of reputation. To help mitigate these issues, maintaining HMDA data integrity is essential.
The Home Mortgage Disclosure Act (HMDA) was created to enhance the monitoring of lending patterns and to ensure financing needs are met across a diverse field of potential borrowers. Submitting loan origination and application data on borrower demographics and loan features enables enforcement agencies to identify financial institutions who excel at fair lending and those that require further investigation. In order to accommodate that goal, new data points were added in hopes to further keep biases in check and reduce barriers to homeownership for protected classes.
The new data delivers a deeper understanding of institutional borrowing practices. Regulatory agencies can now apply comprehensive data screening, data monitoring and statistical modeling routines across all lenders subject to HMDA reporting requirements. In addition, many of the new HMDA data fields, like age, credit score and debt-to-loan ratio, can be used for more effective identification of institutions with elevated potentials of fair lending risks.
With the release of the new data, 2020 is the first time members of the public will have greater access to some of the key determinants of underwriting and pricing decisions. Be assured, litigators and advocacy groups will be taking a close look for any sign of unfair practices. Since disparities are estimated after a broader range of pricing and underwriting factors are applied, litigators can present more credible fair lending cases that on the surface appear to be true than with previous HMDA data sets. Furthermore, journalists will also have access to the data, possibly increasing marketing and reputational risks.
Peer analysis also benefits from the new data. Because it is accumulated from all covered financial institutions, it is particularly helpful for defining local and national benchmarks. Peer comparisons can be expanded beyond penetration rates in minority census tracts to include APR, total loan costs, product features and so on. A clearer picture is presented, allowing regulators to more accurately compare benchmarks and identify institutions with elevated fair lending risks.
With more public access to HMDA data, regulators advise caution when interpreting this data, especially if it leads to accusations or conclusions of discrimination. According to a FFIEC Press Release, “HMDA data alone cannot be used to determine whether a lender is complying with fair lending laws. The data do not include some legitimate credit risk considerations for loan approval and loan pricing decisions. Therefore, when regulators conduct fair lending examinations, they analyze additional information before reaching a determination about an institution’s compliance with fair lending laws.”
In today’s world, businesses rise and fall on the whims of public perception. An unsubstantiated claim of discriminatory lending practices based on misinterpreted data could have far-reaching consequences. What can financial institutions do to protect themselves? Understand your data, especially when underwriting and pricing decisions can create and identify disparities. Realize how your data can be interpreted by public regulators, advocacy groups, journalists and litigators. And then be prepared to tell your story and/or present the corrective and preventive actions taken.
The only way to minimize or eliminate risk is to consistently monitor and analyze your own data for pricing, underwriting and redlining risk. Keeping data clean and relevant is essential for accurate interpretation. In addition, separate assessments should be conducted to identify possible anomalies generated by the expanded data fields. This can be an intensive undertaking. Automated compliance software for HMDA reporting will help ensure data accuracy. At the same time, it will help identify fair lending risk points in the application and origination process. When combined with analysis and interpretation, you should be able to identify any additional risk factors.
Marquis can provide a turnkey solution when combining industry-leading tools like CenTrax NEXT compliance software with the experienced and intuitive skills of the Marquis Compliance Professional Services experts. These services can make a great difference in your HMDA reporting process by regularly monitoring and cleaning your data and then helping you understand the HMDA Integrity Analysis. With cleaner data and a deeper understanding of how it can be interpreted, your institution will be better able to respond when your HMDA data is used by regulators and the public to evaluate fair lending risks.
It’s clear. In today’s data-rich environment, retailers must optimize the consumer experience to drive business through actionable insights. 83%[1] of marketers exceed their forecasted return on investment (ROI) by implementing personalization driven by data. 91%[2] of consumers assume brands will recognize and remember them. With first-year churn at 50% for financial institutions, it’s understood that personalization can help reverse that trend.
“Data is the new oil. It’s valuable, but if unrefined it cannot really be used.”
Dave Humby, Chief Data Scientist at Starcount
Oil starts as crude and is only usable after it’s been refined. The same goes for data. To make it actionable and provide a personalized experience, we need to draw from multiple data sources. The following six data resources will help align your audience with your marketing efforts and help you create timely and relevant communications.
Key Data Source 1: Demographics
Demographics, the study of a population and its components, provide insight into a household’s composition, including finances, life events, buying activities, buying behavior and major purchases. They also deliver facts, like age, gender, income level, race and ethnicity. These components help create solid customer/member profiles and are the foundation of any successful campaign.
Demographics, in combination with your core data, help determine segmentation, where they exist and their basic characteristics. Armed with this knowledge, you can confidently develop your marketing strategy and plan.
However, demographic data is limited. “It offers a singular view, like a snapshot in time,” offers Amy McConnell, VP of Marketing Strategy at Marquis, a financial services market leader. “To really harness the power of demographics, you should use this intelligence in conjunction with other data sources.”
Key Data Source 2: Psychographics
Psychographic data sets explore values, attitudes, interests and personality. From them, we can gain a deeper understanding of our financial institutions’ customers/members. This intelligence gives us insight on where they work, play and how they spend their money. All of which aids in understanding who our customers/members are and how to best reach them.
These insights into individual tendencies enable you to build a robust behavior profile, deepen your understanding of segment behavior and assist with strategic media placement. “Psychographics allow you to target smarter by knowing and finding who needs your financial institution’s services,” McConnell added, “They also help drive retention and enhance product offerings based on usage patterns.”
Key Data Source 3: Propensity
Propensity data defines who is in the market for a specific product, like an auto or mortgage loan, and who is likely to have products elsewhere. Drawn from transactions, online and social tracking, surveys and more, propensity data predicts brand affinity along with customer/member preferences and behavior. This data enables strategic targeting and allows you to implement a mirroring effect. However, propensity information is only the likelihood a consumer is interested in specific product, not a guarantee. It’s best to couple this information with other relevant data sources.
Key Data Source 4: Mapping
Mapping converts data into visual references based on location. The visual effect creates a new perspective, making customer/member and prospect clusters as well as their proximity to you and competitors’ financial institutions more visible. For example, in an area dominated by apartment buildings, a personal loan may seem appropriate; however, when demographic, psychographic, and propensity data are overlaid, the dwellers may be more prone to be in the market for a mortgage. It is important to partner with your compliance affiliates to avoid regulatory concerns and mitigate any risks with the usage of mapping and demographic data for marketing perspectives.
Key Data Source 5: Credit Scores
Credit score data leverages a secondary credit risk ranking to help create segments and determine opportunities. A strong credit score is a great indicator for prequalified offers and prescreening for credit increases and activations. However, credit monitoring services, like FICO, are highly regulated. If used with close monitoring and approval from compliance affiliates, the data can help create a powerful and personalized experience to delight your customers/members and strengthen your connection.
Key Data Source 6: Credit Monitoring
Credit monitoring data allows you to know what customers/members are doing outside of your financial institution. “What if you could monitor what your customers and members are doing outside of your organization and take action on it?” asks Andrew Lampkins, SVP of Marketing Client Relationships at Marquis. Credit monitoring helps drive timely and relevant marketing messages at the right time.
Data Management and Reporting
With the vast amount of intelligence collected from these sources, interpreting the data often can be daunting, time consuming, and utilize multiple resources. Using a partner to collect and interpret the data may help to alleviate the strain. Companies like Marquis put their experience and expertise at their client’s disposal. Marquis’ insights help develop strategic marketing plans based on their data, the institutions unique customer/member base and the financial institution’s product offerings.
Without measurable results, ROI can be attributable to other sources. Marquis also offers reporting tools to help their clients discover what campaigns are successful and where programs can improve. The Marquis NEXT Reporting Tool delivers a complete view of campaigns, from product performance to opening rates. Lampkins adds, “A tool like Marquis NEXT is ideal to see the growth of new products due to your campaigns.”
Go Forth and Personalize!
Data is valuable. The insight it provides is the basis of any personalization which guides us on who to target, what consumers want, when they want it and where they are most likely to view the message.
For these reasons, these six data sources are essential to your marketing strategy. They are the keys to winning campaigns with compelling offers and a personalized experience. You’ll gain valuable insights, allowing you to learn more about your audience and their needs. Multiple data sources will also uncover new marketable segments that enable continuous growth. Most importantly, personalized content with the right message delivered at the right time creates loyal and lifelong customers/members who will turn to you first for their financial needs.
[1] Invesp https://www.invespcro.com/blog/data-driven-marketing/
[2] Accenture https://www.accenture.com/_acnmedia/pdf-77/accenture-pulse-survey.pdf